The Savings Expert: They're Lying To You About Buying A House! Tariffs Are About To Skyrocket Cost Of Living! Here's The Truth About America Collapsing!

Steven Bartlett (0:00)

How important is this tariff situation?

Morgan Housel (0:02)

It has the potential to be the biggest economic story of our lives. People are losing a lot of money on tariffs, and you're probably a matter of weeks away from empty shelves. And there's a button on the president's desk that says, end it right now.

Steven Bartlett (0:12)

So can you tell me what a tariff is?

Morgan Housel (0:13)

I'll keep this very simple.

SPEAKER_3 (0:15)

Morgan Housel is the money mindset guru who's shaking up everything you think about wealth and how to achieve it.

Steven Bartlett (0:21)

I looked at the most Googled questions around money, and one of the most popular is how to achieve freedom financially.

Morgan Housel (0:26)

It is largely a mindset. You have an obligation to understand how money works and how to manage it. And it's one of many topics in which you're going to learn the best by experiencing the downside. I'll come back to that.

Steven Bartlett (0:36)

The next question is how to save money.

Morgan Housel (0:39)

So most people view saving money as it's just wasted sitting there. But you need the push-in so that when the economy goes south and there is a recession, I want to have a level of control over my ability to support my family.

Steven Bartlett (0:49)

So how much money do you think it's sensible to have saved?

Morgan Housel (0:51)

This is a bad answer that no one's going to like, but...

Steven Bartlett (0:54)

When you look at all these people through history that have generated great wealth, are there certain strategies they've deployed?

Morgan Housel (0:59)

One thing that virtually everyone listening to this could learn from is they were way more patient and had way more endurance than anyone else.

Steven Bartlett (1:05)

Also, I wanted to understand investing and this idea of compounding interest.

Morgan Housel (1:09)

So compound interest is the most misunderstood thing about investing because that's what builds wealth. If you look at Warren Buffett, he wouldn't want to get haircuts because if he invested that money and leave it alone for 50 years, in his mind, a haircut would cost $10,000.

Steven Bartlett (1:20)

And then do you recommend people try and buy houses or is it just to rent those houses?

Morgan Housel (1:25)

So the truth is...

Steven Bartlett (1:33)

In 2020, my older brother Jason came to me after spending more than a decade working in the finance industry. And he said to me, Steven, there is one book you need to read to understand money. And that was your book, The Psychology of Money. And that's how I came into your world and understood who you were, what you think. And really, this book has shaped how I think about money ever since. And this is why I loved having you on the show last time, but I was insistent to speak to you again with everything that's going on in the world right now. Morgan, what is the most important thing we should be talking about at this present moment based on, I guess, the subtitle of this book, Timeless Lessons of Wealth, Greed, and Happiness?

Morgan Housel (2:19)

Thank you, Steve. It's so good to be back. I think what I like about what you just said, and thank you for that, is that you said the book changed how you think. And that's important because the book does not tell you what to do.

Nowhere in the book do I say, this is how you should invest your money. This is how you should spend your money, because you're different from me and everyone else. We're all different. I've always just been interested in how people think. Like, what's going through your head when you're making investing decisions? And if you can understand greed, fear, risk, envy, jealousy, those topics, that is way more important than anything they will teach you in a Ph.D. finance course at Harvard. Not that the technical stuff doesn't matter, but the psychological stuff with money is everything. I mean, so much, so many money problems in the real world have to do with impatience, envy, greed. That's it. It's not that people don't know the formulas, don't know the data, don't know, you know, how to calculate compound interest by hand. None of that matters. It's envy. It's impatience. And so that, as a writer, that's what I was always interested in. Like, I'm tired of people giving advice and saying, these are the stocks you should buy. And here's what the economy is going to do next quarter. I was, like, no one was any good at it. But I was always just fascinated in what's going on in people's heads. And you asked, why is that important right now? I think it's always important. Like, those topics of, you know, the subtitle is timeless lessons, because I think a lot of these things were as true a thousand years ago as they will be a thousand years from now. Like, greed and envy and impatience is just ingrained in how people think. It always has been. And so you see what's going on right now with tariffs, the economy, the stock market's gone up a lot, Bitcoin's gone up a lot. So these points have always been true, but a lot of them are magnified right now. A lot of people have made a lot of money on Bitcoin. A lot of people are losing a lot of money on tariffs. So greed, fear, envy, it all kind of just collides. It is right now.